Newspaper article The Journal (Newcastle, England)

House of Fraser to Shut Two North East Stores

Newspaper article The Journal (Newcastle, England)

House of Fraser to Shut Two North East Stores

Article excerpt

Byline: JONATHON MANNING Business writer jonathon.manning@ncjmedia.co.uk @JONNYAMANNING

HOUSE of Fraser will close two North East branches and warned that the group is at risk of collapse if the proposal is rejected.

The closures, which includes stores in Middlesbrough and Darlington, account for more than half of the chain's 59-shop estate across the UK and Ireland and are part of a radical rescue plan that could cost 6,000 jobs.

The radical rescue plan is being undertaken through a company voluntary arrangement (CVA) - a controversial insolvency procedure in vogue among struggling retailers - and must be voted through by creditors.

But Alex Williamson, chief executive of House of Fraser, said: "We see it as the last viable, solvent proposal for the business. The CVA is an opportunity for all creditors to take a view on whether they believe in the viability [of House of Fraser] as a restructured business."

If the CVA is approved by landlords, it will affect up to 2,000 House of Fraser staff and a further 4,000 across brands and concessions. The company's Metrocentre store is not included in the closure list, but if the CVA is rejected and the group fails to secure additional funding, then House of Fraser could be forced to file for administration.

House of Fraser said the shops earmarked for closure, including its Oxford Street store, would remain open until early 2019.

The group also plans to relocate its Baker Street head office and the Granite House office in Glasgow to help slash costs and "secure House of Fraser's future".

House of Fraser said it has already informed staff set to be impacted by the plans, and was committed to "working with all those affected openly and with sensitivity over the months ahead".

As well as the store closures, House of Fraser's restructuring deal will also see the rents slashed for a further 10 stores that will remain open.

But landlords, who must vote through the plan, have already expressed serious concerns about the proposals and met on Tuesday to discuss how to respond to House of Fraser.

At least 75% of creditor approval is needed, with the vote set to take place on June 22. …

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